RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Softs

Short covering rally in sugar to end shortly, or new uptrend beginning? | RJO Futures

Posted 05/17/2017 3:30PM CT | Joe Nikruto

This week’s comment finds July sugar working hard to carve out a bottom. Price action from the last three trading sessions has taken July sugar up over the 18 day moving average, 15.77. In fact, the July contract has closed above the 18 day moving average TWO days in a row, first time since late February. Declining open interest and increasing volume along with our market breaking out of a rough looking cup with handle formation speak to a near term bottom for July sugar. Both strength in crude and the Brazilian currency are touted by analyst Hightower group as reasons to arrest the downtrend in the July sugar contract. Fundamentally, it is difficult to see how sugar could mount a rally on its own merits at this time. Oftentimes, the market will turn technically before the fundamental perceptions can change. This can make it wiser to trade what you see on the chart as opposed to waiting for the fundamentals to line up neatly. With the 18 day moving average at 15.77, any test of this area could be bought using 15.46 as a tight level to manage risk. Traders more committed to the long side could use a move to new lows, below 15.24 as a less tight but equally effective area to make sure they are not buried under a resumption of the downtrend.  

 

Jul ’17 Sugar Daily Chart

Jul '17 Sugar Daily Chart

Joe Nikruto

Joe Nikruto attended Indiana State University and DePaul University in Chicago with a major concentration in economics. "It was during college that I got a job as a runner at the Chicago Board of Trade. I was immediately hooked," he says.He adds that he also enjoys futures trading because anyone can do it. "Your success depends on how you handle the risk and how much work you are willing to put in. You don't need a big-time Wall Street connection, or a degree from an Ivy League school to get started. Your success largely depends on you and what you put into it." In 1992, he started as a runner and back office clerk for a very large futures commission merchant (FCM). He moved up to pit clerk, then research associate working on the trading floors directly for a grain and livestock concern based in Memphis. He spent time on various trading desks for a large retail FCM and then became Series 3 registered in 1997. He also helped develop an online trading platform and consulted on development and trading of mechanical trading systems. He has always worked to assist his clients with all types of trading-from option strategies and hedging to complicated mechanical trading systems. His advisory background includes Floyd Upperman, McMaster, Walter Bressert, Ken Roberts, Tech Guru, Hightower, Helms and Barry Rosen. As for his involvement with RJO, Nikruto says, "R.J. O'Brien has been in operation for more than 100 years. That is a century of supporting customers. You have to be doing something right for folks who use futures to choose to do business with you for that long."